Stimulus Bill Provides Funding for Education
What American Recovery and Reinvestment Act Means for Schools
Mar 11, 2009
The American Recovery and Reinvestment Act of 2009 (ARRA), also known as the Economic Stimulus Bill, was designed to “create jobs, restore economic growth, and strengthen America's middle class through measures that modernize the nation's infrastructure, enhance America's energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need.” Signed into law by President Obama on February 17, 2009, ARRA provides more than $100 billion in education funding, including early childhood education, college grants, tuition tax credits, and billions more for school modernization.
How Education Funding Will be Distributed
The $100s of billions in education funding provided through ARRA will be distributed to governors and state education agencies through a combination of formulas (specific amounts allocated for each state) and competitive grant programs. Funds are assigned to several categories:
- $40 billion in state stabilization funds will help avert education cuts in exchange for a commitment from states to begin advancing education reforms. School systems may use some of these funds for school modernization, a critical need in both urban and rural school districts.
- $13 billion for Title I funding provided for disadvantaged students through the Elementary and Secondary Education Act of 1965. This includes $3 billion for Title I school improvement programs.
- $12 billion for Individuals with Disabilities Education Act (IDEA) programs, a law ensuring services to children with disabilities throughout the nation.
- $5 billion in “incentive grants,” distributed on a competitive basis to states that have aggressively pursued higher standards, quality assessments, strong data systems and teacher quality programs. This includes $650 million to fund school systems and non-profits with strong track records of improving student achievement.
- $5 billion for Early Childhood, including Head Start, early Head Start, and programs for infants with disabilities.
- $2 billion for other investments, including pay for performance (merit pay for teachers), teacher quality investments, technology grants, vocational rehabilitation, and work study.
- $30.8 Billion for College Affordability, including Pell Grants and simplification of applications for financial aid.
Key Education Priorities of the Obama Administration
On March 10, 2009, the White House released an education fact sheet outlining the administration’s priorities for education and allocation of education stimulus funds. In it, President Obama calls for better early childhood education, state-of-the-art testing, performance pay for teachers, and more public charter schools.
In addition, during a March 10th address to the US Hispanic Chamber of Commerce, and later during a surprise visit to the Chief Council of State Legislators’ legislative meeting, the President called for states toexpand effective after-school programs, and to rethink the school day to incorporate more time for learning – either during the summer or through expanded-day programs – stating: “the challenges of a new century demand more time in the classroom.”
Unprecedented Opportunity for Education
An initial $48.6 billion in education funding provided through the Economic Stimulus Bill will be distributed by formula to state governors by the end of March 2009. The bill provides a remarkable opportunity for states to fund innovation and reform in hundreds of thousands of classrooms across the nation. President Obama and US Education Secretary Arne Duncan view ARRA as a chance to implement real change in American schools.
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